EXPLANATORY STATEMENT
Select Legislative Instrument 2008 No. 76
(Issued by the authority of the Minister for Employment and Workplace Relations)
Remuneration and Allowances Act 1990
Remuneration and Allowances Amendment Regulations 2008 (No. 1)
Section 8A of the Remuneration and Allowances Act 1990 (the Act) provides that the Governor-General may make regulations prescribing matters required or permitted by the Act to be prescribed or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The purpose of the proposed Regulations is to freeze federal parliamentarians’ base salary as at 1 July 2008 for a period of 12 months. The Prime Minister announced this measure in the House of Representatives on 14 February 2008.
The Act sets out the annual base salary payable to Senators and Members of the House of Representatives. Paragraph 1(2)(b) of Schedule 3 to the Act provides that the annual base salary of Members of Parliament is equal to the percentage (not more than 100%) of a reference salary, as prescribed by regulations. ‘Reference salary’ is defined as the annual salary identified as the reference salary for a principle executive classification, in a determination of the Remuneration Tribunal under subsection 5(2A) of the Remuneration Tribunal Act 1973.
Subclause 1(3) of Schedule 3 to the Act provides that before the Governor-General makes a regulation for the purposes of paragraph (2)(b), the Minister must consider advice from the Remuneration Tribunal about the proposed regulation.
Regulation 5 of the Remuneration and Allowances Regulations 2005 (the Principal Regulations) currently provides that the base salary of a Member of Parliament is equal to 100% of the reference salary for Band A of Principal Executive Office (PEO) Classification as set out in Remuneration Tribunal Determination 2005/19 (the reference salary). The Remuneration Tribunal adjusts the reference salary for PEO classifications each year by amendment to the 2005/19 Determination. Any increase to the Band A reference salary would flow through to parliamentarians’ salary.
The amending Regulations amend regulation 5 to reduce the percentage of the Band A reference salary used to calculate parliamentarians’ annual base salary for the financial year commencing 1 July 2008 and for each subsequent financial year.
The practical effect of the amendment is that any increase made by the Remuneration Tribunal to the reference salary for the 2008-2009 financial year (in dollar terms) will not flow on to the parliamentarians’ base annual salary in that financial year and subsequent years.
The Remuneration Tribunal has been consulted about the proposed approach to framing the regulation, as required by subclause 1(3) of Schedule 3 to the Act.
The Regulations commence on 1 July 2008.
The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2005.
Overview
The Remuneration and Allowances Amendment Regulations 2008 (No. 1) were enacted to freeze federal parliamentarians' base salary for a period of 12 months, starting from 1 July 2008. This measure was introduced in response to the Prime Minister's announcement on 14 February 2008. The Remuneration and Allowances Act 1990, enacted by the Australian Parliament, addresses the remuneration of members of the Parliament, including Senators and Members of the House of Representatives. The policy objective behind the 2008 Amendment Regulations was to mitigate the effect of potential salary increases on parliamentarians' remuneration, thereby addressing economic considerations at the time. The Minister for Employment and Workplace Relations issued these Regulations under the authority granted by Section 8A of the Act, ensuring that any adjustments to the reference salary by the Remuneration Tribunal would not translate into higher base salaries for parliamentarians.
Scope and Application
The Remuneration and Allowances Amendment Regulations 2008 (No. 1) apply to the federal parliamentarians, specifically the Senators and Members of the House of Representatives, by amending the base salary as stipulated in the Remuneration and Allowances Act 1990. These regulations are designed to freeze the federal parliamentarians' base salary at its level as of 1 July 2008 for a period of 12 months, in accordance with the announcement made by the Prime Minister on 14 February 2008. The regulations achieve this by altering the percentage of the reference salary used to calculate the annual base salary for parliamentarians, effectively preventing any annual adjustments made by the Remuneration Tribunal to the reference salary from being applied to parliamentarians' salaries. This measure is geographically limited to the Commonwealth of Australia and does not extend to state or territory parliamentarians or any other entities. The amendments to the Remuneration and Allowances Regulations 2005 come into effect on 1 July 2008 and are made under the authority of the Minister for Employment and Workplace Relations, following the necessary consultation with the Remuneration Tribunal.
Key Provisions
The Remuneration and Allowances Amendment Regulations 2008 (No. 1) introduce significant changes to the Remuneration and Allowances Act 1990, specifically affecting the salary of federal parliamentarians. Regulation 5 of the Principal Regulations, which previously set the base salary of a Member of Parliament at 100% of the reference salary for Band A of Principal Executive Office (PEO) Classification, is amended to freeze the base salary for a period of 12 months starting from 1 July 2008. This change means that any increase in the reference salary, as determined by the Remuneration Tribunal, will not be applied to parliamentarians' base salary during this period. The reference salary is defined as the annual salary identified by the Remuneration Tribunal under the Remuneration Tribunal Act 1973 and is adjusted annually.
These Regulations impose specific obligations on the Minister for Employment and Workplace Relations, who must consider advice from the Remuneration Tribunal before making any regulation under the Act. The Remuneration Tribunal has already been consulted about the proposed approach, in compliance with the requirements set out in subclause 1(3) of Schedule 3 to the Act. This ensures that any proposed changes to the salary structure are well-informed and consider the tribunal's expert input.
There are no specific offences or penalties outlined in the Remuneration and Allowances Amendment Regulations 2008 (No. 1). However, the Regulations themselves are a legislative instrument governed by the Legislative Instruments Act 2003. Breaches of the legislative requirements under this Act could result in legal consequences, although the specific penalties would depend on the nature of the breach and other relevant laws. The primary focus of these Regulations is to implement the policy decision to freeze parliamentarians' base salary, rather than to create new criminal or civil penalties.